The major stock indexes traded back and forth the unchanged level today, as critical support was challenged, with modest gains going into the close run on lower volume.
Officially, the Dow industrials advanced 0.5% on NYSE volume of 4.8 billion shares, while the NASDAQ rose 0.5% on 1.9 billion. The leadership profile remains positive, with 185 stocks making new highs versus 58 making new lows.
The short term momentum oscillators remain negative, non-confirming the bullish stance of the AlphaKing Trading Indicator for the NASDAQ (while the Russell 2000 AK Trading Indicator remains negative.) We have no new trades at this time.
The bulls and bears continue to position themselves either side of the Dow 10,300 line, where they have been digging in over the past three months as they prepare for a financial equivalent of Gettysburg. All rally attempts above that level have met stiff resistance by the bears, while all bear pushes close to Dow 10,300 have been met with the bulls stepping forward to hold their lines.
A capitulation - and rout - is sure to come out of this war once a victor is declared. Sideways churn is either a top or a base and basically something has to give with this set up, and soon. No one knows for sure how this will turn out - as there are two type of market analysts: those who don’t know what will happen next, and those who don’t know they don’t know - and we continue with our plan of following the markets wherever they end up going. Things can happen pretty quickly from this precarious technical set-up, as the losing side capitulates and a buying/selling frenzy sets off for real.
Email us if you are interested in us offering an auto trade option, where you open an account with a broker so they can enter the AK trades for you.
401K investors should be invested in a money market fund.
Kevin Wilde, Chief Trading Strategist AlphaKing.com.
